It will be tough for the Brazilian congress to approve in the short term the agreement reached with Paraguay referred to the surplus energy from the world’s largest operational hydroelectric dam Itaipu due to the coming electoral year.

The accord was signed last July in Asuncion by Brazilian president Luiz Inácio Lula da Silva and his Paraguyan counterpart, Fernando Lugo.

“The agreement will be sent to Congress by the Lula administration as soon as possible. Currently it will be difficult for the bill to be considered because of the coming electoral dispute and issues will crop that have nothing to do with the agreement reached,” said cabinet chief of staff Dilma Rousseff.

Rousseff, handpicked by president Lula as the incumbent presidential candidate for October 2010 elections, said Brazil “yielded too much” in the agreement.

The two presidents reached a consensus following ten months of negotiations at times with sour exchanges, to review the Itaipu Treaty dating back to the seventies and more specifically what Paraguay is paid for the surplus power by Brazil.

The agreement contemplates a package price of US$ 360 million annually beginning 2010, which compares favorably with the US$ 107 million Brazil is paying Paraguay for the surplus power, which under the contract can only be traded among the partners of the huge dam.

Furthermore Brazil accepted that Paraguay can gradually begin selling its surplus power in the Brazilian energy spot market instead of government power companies and promised to fund with US$ 450 million a transmission line from Itaipu to the capital Asunción.

Rousseff in a meeting with foreign journalists in São Paulo said Paraguay must respect the terms of the agreement reached,

“We don’t want to reach an agreement which remains open, with the purpose of changing it systematically. We are interested that Paraguay grows and develops and that the bilateral relation is as fair as possible from the Paraguayan point of view,” said Rousseff.